Germany - Eurozone

Austerity advocate Merkel gets 750-euro pay rise


German Chancellor Angela Merkel, Europe’s chief advocate of austerity, is soon to pocket an extra 930 euros a month, bringing her salary to 17,016 euros a month. After meeting new French President François Hollande in Berlin Tuesday, Merkel insisted she would not give in to his call to renegotiate the eurozone stability package.


Germany’s cabinet on Wednesday voted itself a 5.7 per cent pay rise, bringing ministers’

Dossier: Eurozone in crisis

salaries to about 13,795 euros a month and the chancellor’s to 17,016 before tax.

German ministers have not had a raise for 12 years.

After Tuesday’s meeting with Hollande Merkel told the press that she still had differences over growth in Europe with Hollande.

In other austerity news:

  • Greece is to hold an election on 17 June, its second election within two months following the failure of all parties to form a government;
  • Portugal’s unemployment hit a record 14.9 per cent in the first quarter of 2012;
  • France raised nine billion euros in its first bond sale since Hollande was elected – at a lower rate for short-term issues but a slightly higher rate for longer-term;
  • The yield on 10-year Spanish government bonds jumped to 6.495 per cent on Wednesday, well above the 6.0 per cent considered to be unsustainable in the long term;
  • Italian bonds came close to 6.0 per cent;
  • The International Monetary Fund praised Italy’s budget and economic reforms as a model for Europe.

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